Votiv, Inc. v. Bay Vista Owner LLC

• Court: Washington Court of Appeals
• Writing for the Court: VERELLEN, J.
• Decision Date: 16 September 2019
• Docket Number: No. 78289-4-I
• Citation: Votiv, Inc. v. Bay Vista Owner LLC, No. 78289-4-I (Wash. App. Sep 16, 2019)
• Parties: VOTIV, INC., a Washington corporation, Appellant, v. BAY VISTA OWNER LLC, a Delaware limited liability company; BAY VISTA BUILDING ASSOCIATION, a nonprofit association; BAY VISTA BUILDING, a Washington nonprofit corporation; BAY VISTA RESIDENTIAL TOWER ASSOCIATION, a Washington corporation, THE CWD GROUP, INCORPORATED, a Washington corporation; and TATLEY-GRUND, INC., a Washington corporation, Respondents.

VOTIV, INC., a Washington corporation, Appellant, v. BAY VISTA OWNER LLC, a Delaware limited liability company; BAY VISTA BUILDING ASSOCIATION,a nonprofit association; BAY VISTA BUILDING, a Washington nonprofit corporation; BAY VISTA RESIDENTIAL TOWERASSOCIATION, a Washington corporation, THE CWD GROUP, INCORPORATED,a Washington corporation; and TATLEY-GRUND, INC., a Washington corporation, Respondents.

No. 78289-4-I

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE

September 16, 2019

UNPUBLISHED OPINION

VERELLEN, J. — A commercial landlord must fulfill its contractual duties of repair and maintenance in a reasonable manner. When a landlord fulfills its duties unreasonably and interferes with its tenant's use and enjoyment of its leasehold, then it can be liable for the tort of nuisance. If that unreasonable conduct also substantially deprives the tenant of the peaceable use and enjoyment of its leasehold, the landlord can be liable for breaching the covenant of quiet enjoyment as well. Votiv, Inc.'s, lease does not prevent it from suing landlord Bay Vista Owner LLC (BVO) for nuisance or breach of the covenant of quiet enjoyment. Votiv presented sufficient evidence to defeat summary judgment on its nuisance and covenant of quiet enjoyment claims against BVO.

But Votiv's claim of constructive eviction does not survive summary judgment because Votiv never abandoned its leasehold.

Neither party is entitled to contractual attorney fees under the lease because, at this stage of the proceedings, neither is a "successful party," as required in the lease. And no other party can seek fees under the lease because the lease limits fee requests to the landlord and tenant.

Therefore, we affirm in part, reverse in part, and remand.

FACTS

Votiv is a music/media company that leases office space in the top floor of the five-story Bay Vista Tower office building.¹ BVO is Votiv's landlord.² The 18-story Bay Vista residential tower sits atop one-half of the roof of the office building and uses the other one-half of the office building's roof as a common area recreational space for residential tenants only.³ The recreational space is open to the sky and contains large plantings, a walking track, a pool, and a tennis court.⁴ A waterproofing membrane sits beneath the recreational space and above theoffice building's roof to protect the offices from moisture and leaks.⁵ The membrane had deteriorated, allowing leaks into the fifth floor.⁶ Replacement work began in June of 2017.⁷

Votiv soon complained about disruptions to its work from construction noise and vibrations.⁸ Construction occurred primarily during business hours on weekdays. In an attempt to minimize disruptions, some of the noisiest work was scheduled only for weekends.⁹ In July, three days after BVO responded to Votiv's complaints, Votiv sued to stop construction.¹⁰ The defendants included BVO; The CWD Group, Inc., which managed the construction project; the Bay Vista Building Association, which is the management organization for decisions affecting both the residential and office portions of the building; the Bay Vista Residential Tower Association, which is the homeowners association for the residential tower; construction company Tatley-Grund, and other parties.¹¹ The court denied Votiv's request for an injunction.¹²

Votiv also sought damages from BVO for breach of the lease and damages from all defendants for nuisance.¹³ BVO moved for summary judgment on all claims.¹⁴ The court relied exclusively on section 32 of the lease, which allows the landlord to enter the premises to maintain, restore, or improve the premises or the building when the landlord has the right or obligation to maintain, restore or improve. Because section 32 also limits claims against the landlord arising out of the landlord's entry on the premises for those purposes, the trial court granted summary judgment on all claims against all defendants and awarded attorney fees to BVO.¹⁵ The court denied a motion by all other defendants (collectively CWD) for an award of attorney fees under the lease.¹⁶

Votiv moved for reconsideration. The court denied the motion and awarded BVO attorney fees for responding to the motion to reconsider.¹⁷

Votiv appeals the grant of summary judgment, denial of its motion for reconsideration, and the awards of attorney fees. CWD cross appeals denial of its request for attorney fees.

ANALYSIS

We review a grant of summary judgment de novo, performing the same inquiry as the trial court and affirming an order of summary judgment where "'thereis no genuine issue of material fact and the movant is entitled to summary judgment as a matter of law.'"¹⁸ "We review the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor."¹⁹

If the court grants summary judgment in a contract dispute and there are no disputed material facts and no extrinsic evidence presented on the contract issue, we determine the meaning of the contract as a matter of law.²⁰ We interpret the contract to give effect to all provisions and not disregard contract terms used by the parties.²¹ We give contract terms their ordinary meaning unless the entirety of the contract clearly demonstrates a contrary intent.²²

Section 32 Limitations on Liability

When analyzing the lease, the trial court applied "the ordinary definition of premises" to section 32 and reasoned that "just like the roof of a house would be part of the building or part of the premises, any space directly above the space that is for lease is also part of [the premises]."²³ Because section 32 limited BVO'sliability, the court concluded it barred Votiv's claims. But this section is inapplicable.

Section 32 of the lease addresses BVO's right of entry into Votiv's office:

Landlord and its authorized representatives shall have the right to enter the Premises . . . for any of the following purposes: . . . (ii) to do any maintenance; to make any restoration to the Premises or the Building that Landlord has the right or the obligation to perform, and to make any improvements to the Premises or the Building that Landlord deems necessary . . . .

. . . .

Landlord shall not be liable in any manner for any inconvenience, annoyance, disturbance, loss of business, nuisance, or other damage arising out of Landlord's entry on the Premises as provided in this Section, except damage resulting from the grossly negligent or willful acts of Landlord or its authorized representatives. Tenant shall not be entitled to an abatement or reduction of Rent if Landlord exercises any right reserved in this Section. Landlord shall conduct its activities on the Premises as allowed in this section in a reasonable manner so as to cause minimal inconvenience, annoyance or disturbance to Tenant.²⁴

Votiv argues, "Section 32 of the lease does not apply to the present case because Votiv's damages are not the result of BVO's entry on the Premises."²⁵ And section 32 expressly limits BVO's liability only for "damage arising out of Landlord's entry on the Premises."²⁶ Thus, the issue is whether the structural roof is, as the court concluded, part of the "Premises" defined in the lease.

The lease defines "Premises" as "that certain space . . . located on the fifth (5th) floor of the Building and designated as suite 510."²⁷ The "Building" is the "Bay Vista Office Building, together with (i) its Allocated Interest in the Common Elements . . . as set forth in the Condominium Declaration."²⁸ The declaration states improvements to the fifth floor roof are common elements.²⁹ Those improvements include the waterproof membrane, the concrete topping slab, the roof drainage system, the sun deck, and other structures comprising the roof.³⁰ The lease's definition of "Premises" is narrow in scope and does not include the structural roof, which is part of the building but not the premises leased to Votiv.

It is BVO's contractual duty to repair the roof. Section (12)(a) defines BVO's maintenance duties: "Landlord shall maintain in good condition and repair the following: (i) the structural parts of the building, which structural parts include . . . subflooring and roof, (ii) the building standard lighting fixtures, window coverings and ceiling tiles . . . ."³¹ But section 12 does not limit BVO's liability when carrying out these repairs. In addition, the recreational facilities on the rooftop are for the exclusive use of residential tenants and are off limits to Votiv.

The contract does not use an everyday definition for "premises" that included the building's roof, and we will not write one in.³² Section 32 applies only when BVO or its agents enter Votiv's premises. Because no entry occurred, the section is inapplicable and does not limit BVO's liability.

Lack of Control

As alternative grounds to affirm, BVO argues that "it is not liable to Votiv because it lacked ownership of the Roof Deck and control over the Work."³³ But for purposes of summary judgment, BVO conceded that it "accepts Votiv's allegation that it 'directly or indirectly' controlled the Work."³⁴ Because we perform the same inquiry as the trial court,³⁵ this concession continues to bind BVO on appeal.

Even without this concession, the undisputed record shows BVO participated in controlling the building project through the Bay Vista Building Association. The Bay Vista building, which is the office tower and residential tower together, has different owners for its different parts. Each part has a different association to manage that part of the building: the Bay Vista Residential Building Association manages the residential part of the building, and the Association of Office Unit Owners manages the office building.³⁶ Decisions affecting the entirebuilding are made by the Bay Vista Building Association.³⁷ The Building Association has only two members: the Office Association and the Residential Association.³⁸ BVO is the sole member of the Office Association.³⁹ Each member has equal power...